Deal Analysis - Help verify my #'s

[Chris A.]

Hello all,

I've recently reached a point in my journey where I'm actively starting to dive into my market and run some #'s on properties. Since I'm in Las Vegas, I am looking at SFR's. The property I ran my numbers on is 8361 Charlton Valley Ct., Las Vegas, NV, 89123 (Zillow link: https://www.zillow.com/homedet...). 

Listing price: $380,000

Est. ARV = $342,000 (running my own comps.)

Purchase Price = $275,000 (~80% of my ARV)

Loan product = Conv. mortgage 20% down ($55,000) @ 4% interest, 30 years

Rehab costs = $20,000 (guesstimate for my initial run-through of the property. I would like to make the kitchen/ bathrooms modern, new flooring, and put some established privacy plants in the 'backyard')

Rehab costs overrun = 10% ($2,000)

Purchase costs = 3% of purchase price ($8,250)

Gross rent = $1,900 (Using Rentometer. I started pulling my own rent. comps on Zillow and there was only property currently for rent. Not sure how to see properties that are already rented).

Vacancy = 8% of rent ($152/month)

Taxes = $1,461/year ($121.75/month)

Insurance = $1,026/year ($85.50/month)

Property Manager = 10% of rent ($190/month)

Maintenance = 15% of rent ($285/month) (Higher due to property year - 2004)

Cap.Ex. = 8% of rent ($152/month)

HOA Fees = $46/month

Utilities / Landscaping = $0 (paid by tenant)

Principal & Interest = $1,050/month

Operating Income = $1,748/month

Operating Expenses = $865/month (49% of income)

Cash in deal = $85,250 ($55k down + $8,250 purchase costs + $22,000 rehab costs)

Cash flow = -$167/month

CoC = -2.4%

Unless I can get this house for significantly cheaper, this is not at all close to a deal I would want. Plus I would have a bunch of money sunk into the property. Please take a look and let me know how my #'s look and any comments or suggestions you have. Thanks!

[Joshua Janus]

Gross Rent

Did you take into account the square footage, amenities, curb appeal and proximity to schools and or desirable locations? Just because the median 1bed in a 1 mile radius rents for 'x' doesn't mean your unit will. Accounting for multiple variables such as the one's above will give you a more accurate number of what the unit can produce. 

Rehab Costs

Are you able to have a contractor walk through the property or photos and give you an idea of the scope of work? Having a second opinion there won't hurt. 

Vacancy

8% vacancy seems to be on the higher side but that is at least for my market. Is that number well researched? Columbus is closer to 3-5% but again different market. 

Maintenance and Capex

It looks like you are allocating too much of your monthly cash flow to these reserves. Is the house really old and are the capex items on there way out? I use 10% maintenance and 5% capex for homes that are updated or close to. 

Hope this was helpful.